This is a summary of the first quarter fiscal 2008 earnings call as conducted by Tiffany & Co. (TIF: chart) on May 30, 2008

Management

- Vice President, Investor Relations: Mark L. Aaron

Key Investors Issues

- Sales were up 12% to $668 million from $596 million in 2007.
- Earnings from continuing operations rose 20% to $64.4 million or 50 cents a share.
- The firm spent almost $55 million to repurchase almost 1.4 million shares.

First Quarter Highlights:

Tiffany achieved a 12% increase in worldwide sales to $668.1 million, versus $595.7 million in the prior year despite softness in its'' U.S. business.

- Total sales for the Americas region increased 6% in the quarter to $373.6 million from $353 million, compared with a 16% increase last year driven by incremental sales from new U.S. stores.
- From a price stratification perspective, Tiffany and co experienced sales and transactional growth in most price strata, ranging from $500 to $50,000 and above..
- U.S. comp store sales were equal to the prior year after increasing 12% in 2007''s first quarter while the monthly comp trend ranged from flat in February to a 4% increase in March to a 3% decline in April.

Tiffany opened the new Patek Philippe watch salon in its'' New York flagship store in April and initial sales have been excellent.

- Aggregate U.S. brand store comp sales declined 4% in the quarter, versus a 9% increase last year, and the softness was not contained to any particular region.
- Single-digit sales declines in Florida where the firm has eight stores and in California where the firm has 13 stores were not meaningfully different from the overall brand store comp decline.
- Sales to foreign visitors, especially from Europe, continued to have a markedly positive effect on sales in the New York flagship store.

The firm plans to add stores in Pittsburgh and Columbus, and convert a holiday sales boutique it opened in late 2007 in the Mohican Sun Resort in Connecticut into a regular store due to its impressive results.

- Combined Internet and catalog sales increased 1% in the quarter, with insignificant offsetting changes in the average order size and the number of orders.
- The firm finished the first quarter with 81 company-operated Tiffany stores in the Americas versus 74 a year ago and for the year 2008, an addition of six stores in the Americas is on the agenda.
- Total Asia-Pacific sales increased 10% in the quarter and comparable store sales rose 4%, versus increases of 9% in total and 2% in comps in last year''s first quarter.
- Total retail sales in Japan declined 3% in Yen in the quarter, as an increase in the number of jewelry units sold was offset by a decline in the average price per piece sold.
- Comp store sales in Japan declined 7%, with greater weakness early in the quarter and there was no meaningful difference in performance between Tokyo and the rest of Japan due to economic effects affecting consumer spending.

Tiffany and co opened boutiques in the Daimaru store in Fukuoka, in the Matsuzakaya store in Tokyo Ginza, and in the Entetsu in Hamamatsu.

- The firm has also begun the extensive renovation of the Tokyo flagship store, which will result in a major redesign of the interior and a dramatic new façade.
- The quarter ended with 57 company-operated stores and boutiques in Japan versus 53 a year ago.
- Outside of Japan, Asia-Pacific comps rose 22% in the quarter, on top of 24% growth last year. Hong Kong is the largest market and the firm is getting strong growth within China and has already opened two stores this year, with additional ones planned.

European sales were also strong with a 12% comp store sales increase on top of an 11% increase last year.

- In March, Tiffany opened a store in the new Terminal Five at Heathrow Airport, which is enjoying a good start.
- At the end of the quarter, the firm operated 18 stores in Europe versus 14 a year ago.
- Adding it all up, the firm expects to open approximately 18 stores this year across Asia-Pacific and Europe.

Sales in the other channel declined 21% due to lower wholesale sales of diamonds related to the firm''s rough diamond sourcing program.

- The pattern of such sales can vary over the course of the year but currently they are expected to decline modestly for the full year.
- From a merchandising perspective, Tiffany''s 12% sales growth in the quarter was spread among various jewelry categories.
- Engagement jewelry was again a strong performer in the U.S. and in non-U.S. markets, but silver jewelry sales were equally strong, led by the success of Tiffany''s silver charm program.
- Tiffany has many new products in the pipeline and in addition, it is making excellent progress in partnership with The Swatch Group to develop a global Tiffany & Company watch business.
- This year is a transition period as the firm collaborates with Swatch on product design and marketing and Swatch assumes control of manufacturing and distribution.

Gross margin rose to 57.1% versus a restated 56.1% a year ago due to sales leverage on fixed costs and the decline in wholesale sales of diamonds.

- Selling, general, and administrative expenses rose 13% in the first quarter, which was a bit above expectations, but this reflected the translation effect of a weaker dollar.
- The real increase was mostly due to higher labor and occupancy costs tied to new and existing stores, as well as increased advertising spending.
- The ratio of SG&A to net sales was 41.6% versus 41.3% last year.
- Other expenses net of $1.5 million were lower than last year''s $3 million, reflecting lower interest expense.

Net earnings of $64.4 million or 50 cents a share were 20% above the prior year''s net earnings of $53.8 million or 39 cents a share due to revenue growth.

- Tiffany''s return on average stockholder''s equity was 18% in the quarter versus long-term objective for at least a 15% ROE.
- The return on average assets was 11% in the quarter, which compared favorably with the long-term objective to achieve at least a 10% ROE.
- Selling, general and administrative expenses increased 13% due to higher labor and occupancy costs and increased marketing expenses, as well as the translation effect of stronger foreign currencies.
- The ratio of SG&A expenses to net sales was 41.6% versus 41.3% in the prior year.